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Citi joins mobile pay as consumer adoption reaches highpoint

As mobile payments reach critical mass, Citibank is joining the onslaught of providers with its standalone digital wallet as a part of its quest to provide consumers with a wide array of options of interest.

Mobile pay is expected to increase at an 80 percent compounded rate annually by 2020, which has prompted a slew of financial institutions, technology providers and retailers to create their own platforms. Citi is the latest to join in the hopes to appeal to consumers who are interested in the convenience and not lag behind with its mobile pay platform that allows users to pay on apps, Web sites and Android users to pay in store.

“As payments innovation continues to accelerate, it’s important that we offer solutions that are responsive to our customers’ needs,” said Barry Rodrigues, head of global digital payments at Citi. “Citi Pay is a digital extension of the card relationships we have with our customers.

“This wallet allows them to make purchases online and in-app using their existing Citibank online user ID and password, and to complete purchases in stores through tap and pay technology,” he said. “While this is an important step for Citi, partnerships are also a pillar of our global digital payments strategy.

“If our customers want to use third party solutions, we want to make the experience as seamless as possible. We are exploring and enabling a variety of third party solutions. A good example of this is Citi’s payments integration with Apple Pay, Android Pay and Samsung Pay. ”

Citi Pay
While Citi continues to partner with third-party providers, it has developed its standalone digital wallet for those that would like to work directly with the financial institution. Often times consumers will feel more comfortable working directly with the bank or financial institution for technology driven platforms such as mobile pay, as fraud is a significant concern.

Mastercard assisted Citi with the Citi Pay by integrating with its Masterpass platform. The partnership means that Citi Pay will already be available a significant number of retailers worldwide.

Users will not have to create new accounts, but can simply tap into their existing online Citi accounts, which will make the onboarding process much simpler. The simpler onboarding is the more likely consumers will adopt the new platform, as complicated steps will cause many to back out.

Android users will be able to pay in store with the Citi Pay mobile pay at NFC-enabled point-of-sale terminals. The first leg of the Citi Pay rollout will appear in Singapore, Australia and Mexico by the end of the year and to the United States early next year.

“Mobile payments are expected to grow at a compounded rate of 80% annually through 2020 and, according to BI Intelligence, fully 67 percent or Android users and 56% of iOS users make a weekly mobile payment using their phones,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce. “As Amazon paves the way for consumer confidence in 1-click checkout and the secure storage of credit card info, these numbers will keep rising.

“Consumers are finally realizing that a locked smartphone with biometric card use approval is far faster and more secure than fumbling to pay with an actual plastic card, especially when you are on the go,” he said. “Mobile payment solutions that allow customers to not have to pull out the plastic out of their physical wallets have finally reached critical mass, regarding user adoption and acceptance. They solve a problem, because they also allow ship-to and bill-to information to auto-populate the fields of a retail website.

“This saves time, is increasingly seen as more secure, and reduces “fat finger” data entry errors. Citi likely knows that offering cardmembers a “Pay” solution that leverages the trusted name of the card in their wallet is now seen as minimum ante and a necessary benefit to be offered by issuer.”

Mobile Pay atmosphere
With so many retailers, tech providers and financial brands developing their own mobile pay solutions, the feature has now almost become a must-have feature. Consumers no longer want to continually fill out their credit card information every time they make an online purchase, as mobile purchases begin to rise.

For instance, it has only been a few weeks since Kohl’s debuted its mobile payments platform, Kohl’s Pay, but uptake has been so strong among customers that the department store has already released some preliminary numbers.

The results of the first month of Kohl’s Pay bode extremely well for the retailer, with widespread proliferation of the Kohl’s Pay platform occurring around the country. The success of Kohl’s Pay could provide brands within similar retail strata a playbook for how to implement a mobile payments infrastructure (see more).

Mastercard recently made a strategic step forward with its Masterpass, by integrating with established mobile pay platforms such as Android Pay and Samsung Pay. Masterpass, a comprehensive mobile payment option, will also see integration with the mobile payment options of each of the credit card company’s new partners.

Customers of Mastercard who use Samsung Pay, Android Pay or Microsoft Wallet will now be able to shop anywhere of the hundreds of thousands of retailers that are compatible with Masterpass (see more).

“By partnering with MasterPass, Citi can leverage the security of a giant in the mobile wallet space and automatically have CitiPay accepted at retailers that accept MasterPass,” Mr. Kerr said. “Retailers are adopting MasterPass, Visa Checkout, Apple Pay, Android Pay and others as fast as they can fit them into their ecommerce technology roadmaps, because the addition of these checkout options reduces mobile checkout friction and increases conversion rates.

“As Apple Pay and Android Pay move from in-app only to the mobile web, this will increase consumer confidence in the security and convenience of mobile wallets and Citi no doubt sees this trend,” he said.